The “pingdemic” and supply chain problems have seen UK growth dribble to just 0.1% in July. This was after June saw GDP growth of 1%. Though COVID restrictions were lifted in July, rules on self-isolation did not change until August. It meant that hundreds of thousands, if not millions of people had to spend extended periods of time at home.
This clearly had an impact on business and spending. But as we move forwards, there are new and equally pressing challenges that the economy, and indeed UK fenestration needs to navigate.
UK growth slows
The rate at which the UK economy was expected to grow was always predicted to slow. Think of the economy like a rubber band or a spring. Like a spring, the UK economy was suppressed during lockdown. Then, as restrictions were lifted, the spring that is the UK economy bounced back up. Initially the speed of that bounce back was strong, which is where we saw double-digit growth figures for the UK. Then as the energy of that first phase of recovery waned, growth slowed to a more steady pace.
I don’t think, however, anyone expected to see the pace of growth slow to almost nothing. The figure of 0.1% for July is an initial reading, and further revisions could see it moved up or down in the weeks to come. Either way, 0.1% growth is hardly growth at all.
The “pingdemic”, where huge numbers of people were told to self-isolate after being pinged on their phones via the NHS COVID app is being blamed for the slowdown in growth. But as we well know in the UK fenestration sector, acute problems with labour and supply of materials is also beginning to bite. So I suspect there is an element of that in the figures that we see.
Of course, we’re now into September and self-isolation rules have been changed for almost a month. But the problems around labour, skills and the supply chain have only continued to get worse. Economists are now warning that the continued strain on the supply chain will now begin to start having an effect on growth.
For example, UK manufacturing data has begun to show a decrease due to supply chain pressures:
Growth at the UK’s manufacturing sector was strong in August but the #PMI slipped to a 6-month low of 60.3. Headcounts continued to expand, but material shortages and delivery delays led to softer output growth and sharp cost pressures. Read more: https://t.co/gH356PuRn9 pic.twitter.com/pvMpZwIluG— IHS Markit PMI™ (@IHSMarkitPMI) September 1, 2021
The UK fenestration sector is really beginning to feel the pinch now as materials such as glass, polymer, hardware, coloured foils and more are all under strain. Manufacturing lead times extend, deliveries are delayed or missing items, prices continue to rise, labour is a genuine problem. All of these combine to limit the capacity of any company to grow.
We are in the odd position where it is the sheer weight of demand and availability of product which is now holding back the true growth potential of our sector. Usually, a slowdown is initiated by external economic factors, people cutting their spending or politics.
It would be inaccurate to say that the UK economy as a whole is now booming, as we’re still 2.1% smaller than pre-pandemic. But if we can solve the labour and materials problems, there remains a huge reservoir of unspent potential to tap.
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